Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Industrial assets with a lot longer tenures in Singapore are viewing greater need, as worldwide unpredictabilities prompt a flight to quality among occupants and investors, according to a study report by Savills Singapore.
Values of 30-year leasehold commercial possessions tracing by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, showing a lesser hunger among investors for such possessions. In contrast, worths of 60-year leasehold assets climbed 1.4% q-o-q to $569 psf throughout the exact same period. Estate properties spotted even stronger growth, with rates increasing 2.9% q-o-q to $876 psf.
Singapore industrial sales weakened last quarter, amidst a much more mindful operating atmosphere. JTC Corp’s sales caveat information reveals that strata industrial sales dropped 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, claims Savills. “The subdued turn over reflects continued customer selectivity, with capital deployment mainly concentrated in assets supplying stronger principles, longer-term value preservation, or operational benefits,” the report adds.
As a result, Savills Singapore is projecting overall rental growth throughout most commercial sectors to continue to be stable this year. The company is anticipating rental development for multiple-user factories and business parks to come in between 0% and 2% in 2026, whilst warehouse and logistics rents are expected to expand between 0% and 1%.
In the rental market, general leasing volume additionally moderated, with JTC rental information revealing a 1.2% q-o-q decline to 2,867 deals in 1Q2026. On the other hand, rental price motions were mixed, highlighting a more selective leasing market.
” The more powerful efficiency of longer-tenure assets highlights a trip to quality and tenure safety and security, with investors increasingly prioritising possessions that offer higher long-lasting value retention in a much more discerning financial investment atmosphere,” the record clarifies.
Savills anticipates belief in the industrial market to continue to be cautious, as the Middle East conflict possibly evaluates on economic activity in the coming months. Against this background, financier and inhabitant demand are anticipated to stay discerning, skewing in the direction of “modern, well-located and higher-specification assets,” states Alan Cheong, executive director for research and consultancy at Savills Singapore.
Leas for Savills’ basket of prime stockroom and logistics possessions increased 0.4% q-o-q to $1.83 psf per month, sustained by durable demand for top notch logistics facilities. On the other hand, leas for prime multiple-user factories tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the firm credits to “higher occupier selectivity and rates level of sensitivity within the prime exclusive factory section”.
While deal quantity decreased, Savills keeps in mind that demand remains sustained for “well-positioned assets with a reasonable complete value quantum”. Particularly, the company highlights a clear shift in purchaser choice in the direction of commercial properties with longer land periods.
